Taking a look at the weekly chart of the Dow and the S&P, it becomes evident why the averages haven't been able to break through this current range to new, higher highs.
The congestion and resistance at 17,900-18,000 on the Dow, and 2090-2120 on the S&P are as plain as a bright summer day, and thus, what had been considered a Fed-driven market has now become a chartist's nightmare.
Unless there's some good reason for the averages to go higher - and currently there isn't - there's only one way for stocks to go, and that direction would not be in the best interest of most investors, fund managers or pension hopefuls.
Naturally, the market continues to look to the Fed for comfort and trading rationale, but it is becoming more and more difficult for the monetary magicians in the Eccles Building to conjure up increasingly complicated arguments to support an economy (US and global) that, for all intents and purposes, looks to be standing on a foundation built of sand.
In other words, the market is about to go somewhere shortly, and bets are good that it will not be much higher. Earnings have begun to trickle in for the first quarter, and expectations are for another sequential decline in overall top-and-bottom line growth.
Then again, Janet Yellen is god, right?
With the Dollar/Yen carry trade nearing extinction (109.7450), perhaps one should consider a world in which there are no winning trades, such as is the fate of many so-called "home-gamers."
With volatility being wrung out of markets on a regular basis through HFT, that is a consideration that must be taken seriously.
Fraud is on sale, but it cannot be had cheaply.
S&P 500 Futures: 2,059.25, +20.50 (1.01%)
Dow Futures: 17,623.00, +96.00 (0.55%)
NASDAQ Futures: 4,532.00, +62.50 (1.40%)
Crude Oil 37.76 +5.21% Gold 1,224.00 -0.46% EUR/USD 1.1399 +0.04% 10-Yr Bond 1.75 +1.62% Corn 358.00 +0.35% Copper 2.14 +0.21% Silver 15.06 -0.34% Natural Gas 1.90 -2.66% Russell 2000 1,108.81 +1.18% VIX 14.09 -8.63% BATS 1000 20,682.61 0.00% GBP/USD 1.4131 +0.08% USD/JPY 109.7450 -0.01%
Showing posts with label carry trade. Show all posts
Showing posts with label carry trade. Show all posts
Wednesday, April 6, 2016
Monday, May 13, 2013
Slowly Goes Wall Street (Remember, It's May)
Equity markets were rather dull today, on exceptionally low volume - which is saying a lot, since volume left the building years ago.
Dull, boring, inconsequential, however, is how financial markets are supposed to be, or, that is at least how they used to be before the advent of personal computers, CNBC and individually-managed accounts. Today's go-go markets are driven by extra doses of liquidity, courtesy of the Fed (as much as readers hate reading that over and over and over again, the author hates having to mention it even more), HFTs, flash crashes, breaking news (why doesn't somebody fix it?), surprises, tweets, scandals, ponzi schemes, dotcoms, options, derivatives, swaps, repos and hot money flowing from carry trades into equities and back out again.
One can only wonder how many times the same money is re-invested, re-invented, re-created, re-hypothecated, recycled, rinsed and repeated. It seems sometimes that one need only a brokerage account and a pair of fast hands to tip-type your way into the wondrous world of high finance. If only such were true, we'd all be traders and multi-millionaires just like the guys on the infomercials telling you that NOW is the time to FLIP THAT HOUSE!
Alas, investing is boring and unexciting, and well it should be, though Americans, driven by media, need the big splash, the dazzle of bright lights and the promise of easy money to be enticed. Sadly for the marketeers and their media whores, more Americans play the ponies, gamble at casinos or play the lottery than invest in stocks, bonds or commodities. We've been programmed to be risk-takers and the stock market - try as it might - just seems to many to be a rigged game for rich guys in suits and ties and fancy women in shiny, tight-fitting business suits.
Thus, we have these dull markets, in which the major brokerages make war with each other via the computer algos, following each other into what eventually becomes a black hole, a void, a nonsensical, immaterial, valueless dump. That's what our stock markets have devolved into, especially after the crash of 2008-09. The major indices may have come all the way back in the four-to-five years since then, but all that money has been sucked out of the market by the brokerages and hedge funds via bonuses. It's common knowledge that the average investor usually gets screwed unless he/she is either very careful or very smart. There's just no way to win a rigged game. As the old adage goes, "if you're playing a game of poker and you don't know who the mark is, chances are it's probably you."
The general American public is simply not that stupid. After being burned by the high-tech Wall Street crooks in 2000, 2001 and again in 2008, they have not returned. Some maybe, but they're a small minority, mostly younger folks who don't know better or older people with money to burn, potentially. Paper losses still sting, and, if there's another severe downturn in the markets any time soon - an event long, long overdue, according to fundamentals - they'll be gone for good as well.
With all the scams, crimes and untold misdeeds that have become all-too-common on Wall Street - without, incidentally, any criminal prosecutions - is there any wonder that average people with money are still shy about investing in stocks? In a perverse way, thats why this market must and will likely continue to defy gravity and levitate to higher and higher levels: because another crash would destroy what little bit of confidence is left in the ultimate confidence game.
So, now that the banks are all sufficiently recapitalized (supposedly) and everything in America is just hunky-dorey, Wall Street may be looking itself in the mirror and wondering if they've taken too many scalps over the past few years. Maybe they'll keep the liquidity-driven, non-fundamental, irrational exuberance going for a while longer, but slowly, much more slowly.
Or is it time to turn it over again? Wash, rinse, repeat...
Dow 15,091.68, -26.81 (0.18%)
NASDAQ 3,438.79, +2.21 (0.06%)
S&P 500 1,633.77, +0.07 (0.00%)
NYSE Composite 9,437.17, -5.59 (0.06%)
NASDAQ Volume 1,605,809,375
NYSE Volume 3,124,652,250
Combined NYSE & NASDAQ Advance - Decline: 2673-3792
Combined NYSE & NASDAQ New highs - New lows: 475-30
WTI crude oil: 95.17, -0.87
Gold: 1,434.30, -2.30
Silver: 23.70, +0.038
Dull, boring, inconsequential, however, is how financial markets are supposed to be, or, that is at least how they used to be before the advent of personal computers, CNBC and individually-managed accounts. Today's go-go markets are driven by extra doses of liquidity, courtesy of the Fed (as much as readers hate reading that over and over and over again, the author hates having to mention it even more), HFTs, flash crashes, breaking news (why doesn't somebody fix it?), surprises, tweets, scandals, ponzi schemes, dotcoms, options, derivatives, swaps, repos and hot money flowing from carry trades into equities and back out again.
One can only wonder how many times the same money is re-invested, re-invented, re-created, re-hypothecated, recycled, rinsed and repeated. It seems sometimes that one need only a brokerage account and a pair of fast hands to tip-type your way into the wondrous world of high finance. If only such were true, we'd all be traders and multi-millionaires just like the guys on the infomercials telling you that NOW is the time to FLIP THAT HOUSE!
Alas, investing is boring and unexciting, and well it should be, though Americans, driven by media, need the big splash, the dazzle of bright lights and the promise of easy money to be enticed. Sadly for the marketeers and their media whores, more Americans play the ponies, gamble at casinos or play the lottery than invest in stocks, bonds or commodities. We've been programmed to be risk-takers and the stock market - try as it might - just seems to many to be a rigged game for rich guys in suits and ties and fancy women in shiny, tight-fitting business suits.
Thus, we have these dull markets, in which the major brokerages make war with each other via the computer algos, following each other into what eventually becomes a black hole, a void, a nonsensical, immaterial, valueless dump. That's what our stock markets have devolved into, especially after the crash of 2008-09. The major indices may have come all the way back in the four-to-five years since then, but all that money has been sucked out of the market by the brokerages and hedge funds via bonuses. It's common knowledge that the average investor usually gets screwed unless he/she is either very careful or very smart. There's just no way to win a rigged game. As the old adage goes, "if you're playing a game of poker and you don't know who the mark is, chances are it's probably you."
The general American public is simply not that stupid. After being burned by the high-tech Wall Street crooks in 2000, 2001 and again in 2008, they have not returned. Some maybe, but they're a small minority, mostly younger folks who don't know better or older people with money to burn, potentially. Paper losses still sting, and, if there's another severe downturn in the markets any time soon - an event long, long overdue, according to fundamentals - they'll be gone for good as well.
With all the scams, crimes and untold misdeeds that have become all-too-common on Wall Street - without, incidentally, any criminal prosecutions - is there any wonder that average people with money are still shy about investing in stocks? In a perverse way, thats why this market must and will likely continue to defy gravity and levitate to higher and higher levels: because another crash would destroy what little bit of confidence is left in the ultimate confidence game.
So, now that the banks are all sufficiently recapitalized (supposedly) and everything in America is just hunky-dorey, Wall Street may be looking itself in the mirror and wondering if they've taken too many scalps over the past few years. Maybe they'll keep the liquidity-driven, non-fundamental, irrational exuberance going for a while longer, but slowly, much more slowly.
Or is it time to turn it over again? Wash, rinse, repeat...
Dow 15,091.68, -26.81 (0.18%)
NASDAQ 3,438.79, +2.21 (0.06%)
S&P 500 1,633.77, +0.07 (0.00%)
NYSE Composite 9,437.17, -5.59 (0.06%)
NASDAQ Volume 1,605,809,375
NYSE Volume 3,124,652,250
Combined NYSE & NASDAQ Advance - Decline: 2673-3792
Combined NYSE & NASDAQ New highs - New lows: 475-30
WTI crude oil: 95.17, -0.87
Gold: 1,434.30, -2.30
Silver: 23.70, +0.038
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